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Organizations Struggle to Find Best Hiring Assessments

Hiring assessments can do a great deal to help identify job candidates who have the right competencies, knowledge and skills to be successful in a position and who are a good cultural fit, but many organizations fall short when it comes to identifying the best assessments to use to tighten up their hiring process.

When recruiting, companies’ staffing professionals and hiring managers must focus on finding and hiring a candidate who can deliver the organization’s branded customer experience, said Leanne Buehler, Ph.D., director of experience solutions for Colorado Springs, Colo.-based consulting firm Corvirtus. During a Society for Human Resource Management-hosted webcast titled “Hire with Precision: The Science of Identifying the Right Match,” she described how to make good use of four types of hiring assessments.

Benefits of Hiring Assessments

“Many companies are using [cultural fit] assessments more than ever before, so if you are not, you may be missing out on important information that can help you to hire the right people and to really use your talent as a competitive advantage,” said Buehler during the Dec. 20, 2011, webcast.

Using the right hiring assessments can help organizations overcome many of the common hiring mistakes they make, she said. For example, integrating formal assessments in the hiring process can help:

Standardize inconsistent hiring processes across the organization.

Reduce hiring managers’ reliance on their gut instincts.

Increase a company’s focus on candidates’ cultural fit.

Decrease time wasted on vetting unqualified candidates.

“Lacking standardized, consistent processes means companies risk not getting all the information they need from all candidates,” Buehler said. “This makes it difficult to ensure you’re getting the information to make a good decision and can give rise to claims of discrimination if you’re treating people differently.”

Reliance on gut feel or instinct “introduces individual preferences of the hiring manager [into the process]. This confirmation bias allows hiring managers to see what they want to see and not what might impede the candidate’s success,” said Buehler, noting that subsequent hiring decisions “might not necessarily be based on who is best for the job.”

Organizations using scientifically sound assessments can improve employee engagement and productivity and customer loyalty and ultimately help “to drive the ROI of the company in terms of sales and profit,” Buehler said.

Selecting Best Assessment Option

Determining what assessment to use can be challenging, especially for staffing professionals who don’t understand fully the job they are hiring for or their organization’s defined cultural characteristics.

“It’s critical to conduct a job analysis to understand the skills, competencies and knowledge needed to do a job well,” said Buehler. The same is true for cultural fit.

Lacking that understanding of job requirements and clearly defined cultural characteristics can lead to using good assessment tools for the wrong purposes, she added.

For example, “The Myers-Briggs Type Indicator is a great tool to use when it comes to [addressing] personal development, building teams and conflict resolution, but it’s not designed for hiring,” Buehler said.

The most common types of assessments are:

Personality tests, which identify people’s behavioral tendencies and how they might play out in various job-related situations over time. “Conscientiousness can be measured very well with a personality assessment, as can openness to new experiences and service-mindedness,” Buehler said.

Cognitive ability, which helps staffing pros and hiring managers understand candidates’ attributes such as logic and reasoning, problem solving and decision-making skills. These assessments tend to be “one of the strongest predictors in terms of performance across all job categories,” Buehler said, explaining that the higher one scores on the test, the higher the likelihood that they will succeed in the job. However, “they tend to show some disparate impact as well.”

Situational judgment assessments give candidates scenarios that they’re likely to encounter and ask how they’d respond. These are high on face validity, said Buehler, because “they make sense to the candidates and clearly show how the assessment relates to job performance.”

Culture fit assessments help reveal the candidate’s style and preferences as they relate to the company’s culture.

Once the most effective assessment type is determined, companies should ensure the assessment’s scientific integrity, demonstrated by reliability and validity data. Buehler recommends asking assessment providers to share technical manuals that detail research that demonstrates the reliability, validity and fairness of the assessment.

Criterion-based validity shows a candidate’s likelihood of performance. Job-focused assessments are “likely to broaden your candidate pool, and you’ll bring in people with more diverse perspectives and different ways of doing things,” Buehler said.

When it comes to evaluating correlation coefficients and understanding validity, Buehler noted, the U.S. Department of Labor said that any correlation above 0.21 is “likely to be useful” in helping to predict who will be successful on the job; and any correlation above 0.35 is “highly likely to be beneficial”in predicting job success.

Whether the assessment is purchased or developed in-house, it should meet the requirements of the Uniform Guidelines on Employee Selection Procedures,which outline best practices for designing assessments that will not discriminate on the grounds of race, color, religion, sex and national origin.

For assessments to be effective, however, they should be monitored and revised as needed, Buehler said. Buehler recommended choosing two or three key business metrics that one would expect to be affected by the assessment—such as how long people stay on the job, impact on revenue and customer satisfaction—and monitoring those results. Reports should be clear and easy to understand and focused on job-related results, in order to avoid legal pitfalls.

Testing the Test

Buehler described how Kansas City-based UMB Bank developed a cultural fit assessment to help hire for its well-documented culture: “The Unparalleled Customer Experience.”

UMB began by analyzing jobs and identifying critical competency areas employees need to succeed. It then developed a “Brand Ambassador Index” assessment, which embraced the three dimensions of the UMB culture: pride (people who embrace UMB values and have a great attitude); passion (people who are enthusiastic and demonstrate customer appreciation) and power (people who have a can-do attitude), Buehler said.

The company tested the assessment in a validation study: 150 employees in customer-facing positions in three regions completed the assessment. The company got performance information on those employees so it could compare how the test results related to their performance in terms of pride, passion and power.

“The test helped them to predict who would be successful [based] on those dimensions,” Buehler said. Employees who “passed” had a track record of outperforming significantly those who didn’t. For example, those who passed scored 19 percent higher than others on a dimension that measured bringing enthusiasm to work every day, she added.

UMB is working to incorporate the cultural assessment into its hiring process, which also includes a competency-based assessment and a behavioral interview.

“It’s really a great case of using assessments well,” Buehler said. “They started by understanding the job, they defined and documented their culture and their values, they did a validation study and they’re implementing the assessment into a consistent process.”

But Buehler advised being realistic about assessments. “Think about what’s practical and going to be most convenient for your candidate pool,” she said. “Make sure it is written at the appropriate reading level, available in any relevant languages, and doesn’t take an extraordinarily long time—like two hours—to complete. Also, make sure candidates have a way to ask for accommodation if needed under the Americans with Disabilities Act.”